Second Circuit Rejects Claim Policyholder Lawsuit Is Premature

As a Miami insurance claims law firm, my office frequently represents policyholders in litigation against insurance companies that breach their contractual obligation under insurance policies. While an insured can pursue a breach of contract or insurance bad faith claim to enforce his or her right to benefits under a policy, insurance companies have experienced insurance defense attorneys to craft defenses to such lawsuits. If you are a policyholder attempting to defeat such defense strategies, you need an experienced Miami insurance claims attorney in your corner.

A recent case decided by the 2nd District Court of Appeals for Florida provides an example of the types of technical issues that necessitate legal representation in insurance claims disputes. In Curtis v. Tower Hill Prime Insurance Co., the policyholders owned a home that was insured, and the policy included a Sinkhole Loss Coverage endorsement. The insureds filed a claim for sinkhole damage with their insurance company. The insurer hired an engineering company to inspect the property. The report prepared by the engineer concluded that the loss was the result of sinkhole activity.

The parties’ experts disagreed on the cost to repair the damage. The insurer’s engineers determined the cost to stabilize the ground and building to be $93,000 to $95,000. An expert for the policyholders estimated the cost at $193,000 to over $342,000. The parties also disagreed on their estimate of aesthetic repairs. The insurer estimate for this loss was $24,318 while the insureds estimated it at $36,818.

The insurer initiated the statutory procedure of neutral evaluation for sinkhole claims, and the property owners filed a lawsuit for breach of contract shortly thereafter. The insurance company sought summary judgment against the insureds based on three separate grounds. The first two grounds for summary judgment were that no payment was owed under the policy and that the policyholders violated the statutory stay that applied because the neutral evaluation process was initiated.

The trial court upheld both of these initial grounds for summary judgment, but the 2nd District reversed. The first argument for summary judgment essentially amounted to a claim that the issue was not ripe for adjudication. The insurer contended that the insureds could not prove a breach of contract because the time for paying the loss had not yet come and gone. The court rejected this argument assuming arguendo the lawsuit was filed prematurely, summary judgment was not an appropriate disposition since the company had admitted coverage.

The appellate court also rejected the second basis for summary judgment under which the insurer argued the lawsuit violated the statutory stay imposed to permit the parties to participate in the neutral evaluation process. Fla. Stat. Section 627.7074 (2011) provides in pertinent part: “Regardless of when noticed, any court proceeding related to the subject matter of the neutral evaluation shall be stayed pending completion of the neutral evaluation and for 5 days after the filing of the neutral evaluator’s report with the court.” The appellate court pointed out that the language of the statute does not preclude the filing of a lawsuit.

The final basis for the insurer’s summary judgment request was that the insurer failed to comply with its “duties after loss” by limiting the insurer’s access to inspect the property. This argument was rejected both at trial and by the appellate court. The insureds’ compliance with the inspection by the insurer’s engineer on structural and ground reinforcement was considered sufficient to withstand summary judgment even though the policyholders did not permit access to the insurer’s contractor regarding cosmetic damage.

This case demonstrates some of the types of defenses insurance companies in Florida raise to avoid paying a claim that have nothing to do with the merits of the claim. An experienced Miami insurance attorney provides you with the best chance of overcoming such defenses. If you insurance company refuses to conduct a reasonable investigation of your claim or to pay your claim in a timely manner, you might have a right to pursue a claim for insurance bad faith. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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